Fiscal Note
Fiscal Services Division
SF 602 – On-Premises Liquor License (LSB2478SZ)
Staff Contact: Maria Wagenhofer (515.281.5270) maria.wagenhofer@legis.iowa.gov
Fiscal Note Version – New
Description
Senate File 602 provides for the following:
• Holders of a Class A, Class B, Class C, or special Class C liquor control license; a Class B
beer permit; or a Class C native wine permit with an expiration date between May 6, 2020,
and May 5, 2021, are not required to pay the annual license or permit fee or any additional
applicable fee or surcharge to the Alcoholic Beverages Division (ABD) as specified in Iowa
Code chapter 123 upon renewal of the license or permit.
• The ABD is required to remit to the local authority in which the licensee or permittee is
licensed the amount that otherwise would have been collected from the licensee or
permittee. These remittances are to be paid from the Liquor Control Trust Fund before
August 31, 2021.
• A holder of a Class A, Class B, Class C, or special Class C liquor control license; a Class B
beer permit; or a Class C native wine permit that was eligible for a deferment of the
expiration of the license or permit due to the Governor’s Proclamation during this time frame
but paid the appropriate license or permit fee is permitted to receive a refund from the ABD.
These refunds must be paid by the ABD from the Liquor Control Trust Fund before August
31, 2021. Local authorities are permitted to retain any remittances already made in
connection with these renewals.
• Holders of a Class C native distilled spirits liquor control license or a Class D liquor control
license with an expiration date between July 1, 2021, and June 30, 2022, are not required to
pay for the renewal of the license.
The Bill is effective upon enactment.
Background
All license and permit fee revenue is deposited into the Liquor Control Trust Fund. In
FY 2020, $17.7 million in license and permit fee revenue was deposited into the Fund, which
was a decrease of $1.1 million (6.6%) compared to FY 2019. Deposits to the Fund from all
sources in FY 2020 totaled $405.7 million, an increase of $20.4 million (5.3%) compared to
FY 2019. This increase was primarily due to an increase in liquor sales in FY 2020. ABD
expenses that are covered by the Fund increased by $16.8 million (6.7%) compared to
FY 2019. Other ABD expenses are covered by the ABD’s General Fund appropriation. Table 1
provides a summary of deposits, expenses and net revenues for the Liquor Control Trust Fund.
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 Table 1
Liquor Control Trust Fund Summary
FY 2016 – FY 2020
Deposits FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Liquor Sales $ 288,908,791 $ 305,619,127 $ 320,049,812 $ 339,537,641 $ 367,284,902
License and Permit Revenue 15,608,360 15,664,468 16,613,682 18,773,557 17,676,967
Beer Tax Collections 14,231,744 13,904,082 13,592,912 13,438,680 9,435,077
Wine Tax Collections 7,648,753 8,078,043 8,166,553 8,219,810 5,677,108
Miscellaneous Revenue 4,226,128 6,115,965 4,806,557 5,290,473 5,614,701
Total Deposits 330,623,776 349,381,685 363,229,516 385,260,161 405,688,755
Total Expenses 200,367,526 219,986,581 228,179,166 244,804,012 261,613,359
Net Revenues $ 130,256,250 $ 129,395,104 $ 135,050,350 $ 140,456,149 $ 144,075,396
Iowa Code section 123.17 requires transfers from the Liquor Control Trust Fund to the following:
• General Fund
• Iowa Department of Public Health
• Cities and counties
• Iowa Economic Development Authority
Table 2 provides a summary of transfers from the Alcoholic Beverages Division.
Table 2
Alcoholic Beverages Division Transfers
FY 2020
Transfer FY 2020 Actuals
General Fund Reversion $ 116,935,077
Iowa Department of Public Health 25,763,936
State Aid to Cities and Counties 3,301,218
Sunday Sales Grants 931,125
Iowa Economic Development Authority 306,369
Total $ 147,237,725
Assumptions
• A total of 5,604 license and permit holders are eligible for a refund under the Bill.
• The total renewal license and permit fee amount that will be collected for these license and
permit holders is approximately $7.5 million. Approximately $4.9 million of this amount is to
be remitted to local authorities. Under current law, the ABD would retain the remaining $2.5
million.
• There are 323 license and permit holders that were eligible for license or permit renewal
deferment pursuant to the Governor’s Proclamation and the amount collected from these
license and permit holders was $378,000.
• There were 7 Class C native distilled spirits liquor control licenses and 26 Class D liquor
control licenses with an expiration date between July 1, 2021, and June 30, 2022, which are
not required to pay for the renewal of the license under the Bill. The total associated renewal
license revenue is $12,000.
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Table 3 provides the total refund amount for holders of a Class A, Class B, Class C, special
Class C liquor control license; a Class B beer permit; or a Class C native wine permit with an
expiration date between May 6, 2020, and May 5, 2021.
Table 3
Estimated Refund and Local Authority Retained Revenue
Under SF 602 for May 6, 2020, to May 5, 2021
Total On-Premise Licenses/Permits Impacted by SF 602 5,604
Amount Retained by Local Authorities $ 4,932,954
Amount Refunded by ABD fom Liquor Control Trust Fund 2,546,766
Total Estimated Refund Amount $ 7,479,720
Table 4 provides the total refund amount due to license and permit holders remitting license
fees during the license and permit renewal deferral pursuant to the Governor’s Proclamation.
Table 4
License and Permit Holders Eligible for Deferral
Total Licensees/Permittees Eligible for Deferment 323
Total Refund Amount Due to Payment During Deferral $ 377,854
Table 5 provides the total lost fee revenue to the ABD due to waivers for Class C native distilled
spirits liquor control licenses and Class D liquor control licenses in FY 2022.
Table 5
Revenue Loss Due to Class C Native Distilled Spirits and Class D Liquor
Control License Waivers Under SF 602
Total Class C Native Distilled Spirits License Waivers 7
Total Class D Liquor License Waivers 26
Total Lost Fee Revenue Due to Waiver $ 11,590
Fiscal Impact
The total revenue reduction to the State General Fund as a result of SF 602 would be
approximately $4.9 million for FY 2021. This amount includes the total amount the ABD would
remit to local authorities for their uncollected portion of license and permit revenue (Table 3).
The ABD would use current licensing revenue for this expense and reduce the ABD’s General
Fund reversion for FY 2021 by this amount.
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Source
Alcoholic Beverages Division
/s/ Holly M. Lyons
April 26, 2021
Doc ID 12198841219884
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
www.legis.iowa.gov
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